Example of inventory Journal Entries

Example of inventory Journal Entries

There are basically three entries in case of inventory i.e. opening inventory, purchase during the year and closing inventory.

Example of Opening Inventory Journal Entry

ABC & Co has an opening inventory of $ 10,000. What would be the Journal entry for the opening inventory?

Date	Particulars	Dr.	Cr.
	Cost of Goods Sold	$ 10,000
	Inventory		$ 10,000

Example of Inventory Purchases during the year

ABC & Co purchase $ 20,000 inventory during the year. What would be the entry for these purchases?

Date	Particulars	Dr.	Cr.
	Inventory	$ 20,000
	Cash		$ 20,000

Example of closing inventory Journal Entry

At the end of the year the closing inventory for the year is $ 5000. What would be the Journal entry for the closing inventory?

Date	Particulars	Dr.	Cr.
	Inventory	$ 5,000
	Cost of Good Sold		$ 5,000

Ledger of the above Transaction

                                                                        Inventory

Opening Balance	10,000	Cost of Goods Sold	$ 25,000
Cash	20,000	Closing Stock (Balancing)	$  5,000

In above inventory $ 25,000 shows that ( $ 10,000 + 15,000) is charged to cost of goods sold . It means that opening inventory is charged to cost of good sales when a sales is made.